The shock of North Korea's nuclear capability has been compounded by the revelation that Australian-produced uranium has gone astray, yet authorities say there's no cause for alarm.

Each year about 90,000 tonnes of Australian-produced radioactive material is tracked around the globe by the Australian Nuclear Safeguards and Non- Proliferation Office (ASNO). The agency's main task is to ensure no weapons- grade material is diverted to nuclear weapons programs, but the numbers fluctuate considerably from year to year, and it is almost impossible to keep track of it all. Only 10 kilograms of plutonium is required to make a nuclear device.

Between 1999 and 2001 alone, the amount of Australian-obligated separated weapons-grade plutonium located between Europe and Japan dropped suddenly from 1.6 tonnes to 0.5 tonnes. According to the director-general of ASNO, John Carlson, there is an explanation. "The Japanese have a policy of recycling plutonium as an energy source and what that involves is reprocessing spent fuel to extract the plutonium which then can be mixed with uranium and made into fresh fuel," says Carlson. "I would suggest that ... instead of being stockpiled, that separated plutonium is being reused as reactor fuel for power generation."

But Shaun Burnie, the global director of Greenpeace International's anti- nuclear campaign, says neither Australia nor the International Atomic Energy Agency (IAEA) can be so sure. "The Japanese have over 50 nuclear reactors operating 24 hours a day fed by an enormous quantity of uranium annually. So it is very easy for the Japanese, or any country that wants to, to divert plutonium produced in energy reactors without the safeguards regimes picking it up," Burnie says.

Burnie points to comments in April by the then leader of Japan's Liberal Party, Ichiro Ozawa, who said his country should consider becoming a nuclear power to counter China's growing military might. "If China gets too inflated the Japanese people will get hysterical. It would be so easy for us to produce nuclear warheads; we have plutonium at nuclear power plants in Japan, enough to make several thousand such warheads," Ozawa said.

With more than 2,000 tonnes of Australian uranium exported to Japan last year alone, a significant proportion of that plutonium is undoubtedly Australian- sourced.

Australia is the world's second-largest exporter of uranium. Last year it sold more than 8,000 tonnes to 10 countries. Two of our uranium mines, Ranger in the Northern Territory and Olympic Dam in South Australia, are respectively the world's second and third-largest.

And with strong evidence that terrorist organisations are trying to get their hands on radioactive material, Australia's safeguards system is right back in the spotlight and not everyone is satisfied that the regime is up to scratch. "It is plain commercial expediency for the Australian Government to say it has a safeguards system in place because it wants the export dollars, but the bottom line is that a huge proportion of the world's nuclear fissile material is coming out of Australia," says Burnie.

Under the uranium export rules rules imposed by ASNO, all exports are subject to audit and inspection by the office. Each shipper's consignment weight is recorded here, then passed on to the IAEA. "All the nuclear activities in the countries we export to and the Australian uranium they use is under IAEA safeguards and that's the foundation of our system," Carlson says. "And then on top of that we apply additional conditions such as no re-transfer of nuclear waste to another country without our consent and no reprocessing or high enrichment without Australian consent."

Specific weights of uranium enriched for use in nuclear reactors must be recorded, plus any plutonium recovered once the fuel has been reprocessed. "Our starting point is to be very selective about the countries we export uranium to," Carlson says. "They have to be countries that are in good standing in terms of the international non-proliferation treaty. Then when we select a country as being appropriate to trade with, we conclude a bilateral agreement with that country which sets out the conditions for using Australian uranium."

Australia has uranium export agreements covering 27 countries, including the five major nuclear weapons states the United States, the United Kingdom, France, China and Russia and other countries including Japan (the world's largest stockpiler of weapons-grade plutonium), South Korea, Taiwan, Egypt, the Philippines, Finland, Hungary, the Czech Republic and Mexico.

And while Carlson says a condition of Australia signing up a bilateral partner is that country's commitment to nuclear non-proliferation, others are concerned about our involvement with emerging nuclear powers such as North Korea. A 1999 signatory to the non-proliferation treaty, North Korea revealed last month that it had been developing nuclear weapons. And shortly after Australia resumed diplomatic relations with North Korea in May 2000, the Australian Government agreed to help enhance North Korea's nuclear energy program. First in 2000, and then in 2001, ASNO conducted nuclear safeguards training courses for North Korean officials using funding provided by AusAID, Australia's premier trade promotion agency. In total, Australia has contributed $22million to the Korean Peninsula Energy Development Organisation.

Carlson says there is no cause for alarm. "There is a nuclear link between North Korea and Australia, but we are assisting the North Koreans to understand how nuclear safeguards work and how to prepare the kinds of documents that the IAEA require for servicing safeguards agreements.

"I think there's no question that the non-proliferation regime is under some pressure from the 'axis of evil' countries as Iraq, Iran and North Korea are all engaged in activities that threaten non-proliferation objectives, but this is something Australia is working very hard to counter.

"With regard to North Korea, we've been keen to help them understand that the non-proliferation system, of which safeguards are a fundamental part, is actually in their national interest because it helps to reduce tensions between countries. The North Koreans have to come to a realisation that building up nuclear weapons is not in their interest."

Speaking from Tokyo, Australia's Foreign Minister, Alexander Downer, says the region has to stop North Korea from developing nuclear weapons and the missiles to deliver them beyond its borders. Downer says Australia will continue to talk to North Korea, but it will not be rewarded for provocative behaviour. He says Australia has no intention of withdrawing from the Korean Peninsula Energy Development Organisation. According to the department of Foreign Affairs, the objective is to have a co-ordinated and clear international response to the issue of nuclear weapons created by North Korea. Suggestions that UN weapons inspectors would be bought in to ensure North Korea's compliance have been dismissed, because the IAEA is responsible for compliance.

Yet the IAEA was supposed to be monitoring North Korea for the past couple of years, and failed to detect the development of nuclear weapons. When the Weekend AFR asked, in light of this oversight, whether the IAEA was to be trusted with the job, the department's response was non-commital. The Australian Conservation Foundation's nuclear campaign director, Dave Sweeney, points to other weaknesses in the system. "We have a bilateral agreement with Russia which allows them to process Australian uranium," Sweeney says. "We have bilateral agreements with Finland, Hungary and the Czech Republic to import our uranium. Those countries send our uranium to Russia for enrichment and other purposes. But just how secure is Russia?"

Robert Ayson, director of graduate studies at the Australian National University's Strategic and Defence Studies Centre, believes the Australian system is sound. "Clearly there is a high level of international concern wherever you have stockpiles of radioactive materials such as Russia and the nuclear assets of the former Soviet military. There is no doubt these have been identified as potential targets for terrorists. But I would not regard Australia's uranium shipments as adding significantly to that problem. Our shipments are very highly regulated, and there is a high degree of integrity surrounding that system."

Another point emphasised by The Australian Strategic Policy Institute's program director, Aldo Borgu, is that while there is strong evidence that terrorist organisations want to obtain weapons of mass destruction, or radioactive material for use in a "dirty bomb", it's not the most likely threat. "What terrorists want to do is kill people, and as has been shown by events in Bali and September 11, you don't need fancy weapons to kill a lot of people and do enormous damage. We think nuclear weapons and possible dirty bombs pose a significant threat, but it's not top of the list."

However, Adam Cobb, founder and director of boutique strategic risk management advisory firm Stratwar.com and a former special director of strategic policy at the Royal Australian Air Force, says Australia should be extremely concerned at the lack of security surrounding enriched uranium and plutonium transports between Europe and Japan.  "These shipments are vulnerable targets for terrorist organisations like Al Qaeda. Part of that radioactive material is Australian-sourced and in that sense is our responsibility. We have to be very aware of this here."

Australian government policy will ultimately be guided by the view that supplying peaceful nuclear programs which contribute to prosperity is a worthwhile cause. ASNO's John Carlson says: "Australian governments have always taken a view that since we hold a substantial part of the world's uranium, it's our contribution to energy security and economic stability and to make that uranium available as an energy resource.

"To simply leave our uranium in the ground would be of no benefit to anyone. And it certainly wouldn't benefit the non-proliferation cause. It would have a neutral effect and there's no point in that."

I am writing  to correct the record in the article on Australian uranium  exports, "Has anybody seen Australia's uranium" (Weekend  AFR, November 9-10, page 21).
* The article refers in  several places to "weapons-grade"Australian-obligated  plutonium. In fact Australian-obligated plutonium is not  weapons-grade. Weapons- grade plutonium is not produced in  the normal operation of power reactors, certainly not those  operated by electricity utilities using Australian uranium.
* There was no "sudden drop" in Australian-obligated  separated plutonium between 1999 and 2001. The years  concerned were 1999 and 2000. This could give the reader  the impression that in some way plutonium was missing. All  Australian-obligated nuclear material, including plutonium,  is fully accounted for.
* The Australian condition  requiring consent for any retransfer of  Australian obligated nuclear material to a third country  applies to nuclear material, rather than nuclear waste as  stated in the article.Australia does not have a safeguards  agreement with China.
* The claim that "it is very easy to  divert plutonium produced in energy reactors without the  safeguards regimes picking it up" is unsubstantiated, and  ignores the rigorous safeguards and security measures  applying to this material.
* The statement that Japan is  "the world's largest stockpiler of weapons- grade  plutonium" is incorrect, both as to "largest" and to  "weapons-grade".
* North Korea signed the NPT in 1985, not  1999.
* The comments about the IAEA failing to detect North  Korea's recently revealed uranium enrichment program do not  take into account the limited mandate the IAEA has in North  Korea. Safeguards under the NPT did not begin until 1992. Almost immediately the IAEA detected discrepancies in  North Korea's declared holdings of plutonium, raising  concerns about a suspected weapons program. The resulting  confrontation led to the negotiation of the "Agreed  Framework" between North Korea and the US, under which the  North "froze" its plutonium program.

John Carlson, head of the Australian Safeguards and Non-proliferation Office (AFR letters, November 15) is all over the shop in his critique of Jason Koutsoukis’ analysis of the problems arising from Australia’s uranium exports (‘Has anybody seen australia's uranium?’, AFR, November 9).

In a sadly typical piece of obfuscation, Carlson notes that Australian-obligated plutonium is not weapon-grade but he fails to note that so-called reactor-grade plutonium can be - and has been - used in nuclear weapons. The US military successfully tested a weapon with reactor-grade plutonium in 1962.

Carlson says “weapons-grade plutonium is not produced in the normal operation of power reactors”, but, as he knows, there’s always the possibility of ‘abnormal’ operations. And it’s not just power reactors - much smaller research reactors can be used to produce plutonium in support of a weapons program. Israel and India are the most notorious examples of ‘research’ reactors being used for this purpose (most or all of the fissile material for their nuclear arsenals comes from research reactors), but there are at least half a dozen other examples  (e.g. Canada, Iraq, North Korea, Pakistan, Romania, and Yugoslavia).

Carlson says there was no "sudden drop" in Australian-obligated separated plutonium between 1999 and 2001 but then acknowledges that there was indeed a large drop between 1999 and 2000. The only explanation he offers is to “suggest” that the plutonium is being reused as reactor fuel. Can we have something more definitive than a suggestion?

Carlson defends the International Atomic Energy Agency’s safeguards system and says it provides the “foundation” for preventing misuse of Australian-obligated nuclear materials. This is the same system famously described as "half-blind, toothless and mute" by Professor Jim Falk in his 1983 book ‘Taking Australia Off the Map’. The safeguards system was exposed as a farce by the Iraqi regime  in the 1980s and early ‘90s - check out the voluminous material on this scandal published in the Bulletin of the Atomic Scientists over the past decade (<www.thebulletin.org>). Since the Iraq debacle, efforts have been made to improve the system, but it still hopelessly inadequate (and the IAEA is still hopelessly compromised by its other mandate - promoting the spread of nuclear technologies).

The willingness of both Coalition and Labor government’s to allow Japan to separate and stockpile Australian-obligated plutonium ought to be a front-page scandal. A cable from a US embassy official to then US secretary of state Warren Christopher in 1993 posed these questions: "Can Japan expect that if it embarks on a massive plutonium recycling program that Korea and other nations would not press ahead with reprocessing programs? Would not the perception of Japan being awash in plutonium and possessing leading edge rocket technology create anxiety in the region?" No chance of straight answers to those questions from John Carlson or his political masters.

That ASNO has been conducting nuclear safeguards training courses for North Korean officials since 2000 raises the obvious question: who’s to say the knowledge gained by North Korea won’t be used to limit or hinder safeguards rather than assisting in the task?

Carlson says Australia exports uranium only to “countries that are in good standing in terms of the international non-proliferation treaty”. So why export to the USA, which is in breach of its Non-Proliferation Treaty obligations a hundred times over (as is made clear in the US Nuclear Posture Review, leaked earlier this year)? And why maintain a nuclear alliance with this rogue state since it undermines international non-proliferation and disarmament initiatives to do so?